Does Warren Buffett invest in gold? Why or why not? (2024)

FAQs

Does Warren Buffett invest in gold? Why or why not? ›

As Buffett told his shareholders at a Berkshire Hathaway annual meeting, “If you take all the gold in the world…and put it into a cube, it will be a cube that's about 67 feet on a side…but it's not going to do anything for you.” Buffett therefore doesn't see any utility in owning gold because it can't produce things.

Given Buffett's aversion to gold, market watchers were understandably surprised when Berkshire Hathaway invested in Barrick Gold (TSX:ABX,NYSE:GOLD) in Q2 2020, paying around US$560 million for about 21 million shares of the major gold miner.

The average UHNWI holds about 2% of their net worth in gold. While that's more than they keep in cryptocurrencies (1%), it's less than they keep in any other asset classes. In fact, wealthy investors even put more money into “investments of passion” such as fine art, wine, and cars than they do in gold.

Warren stays away from technology companies because he likes investments in which he can predict winners a decade in advance—an almost impossible feat when it comes to technology. Unfortunately for Warren, the world of technology knows no boundaries.

There are several potential risks to investing in gold, including: Price volatility: The price of gold can be volatile, and it may fluctuate significantly over short periods of time.

China has been the largest buyer among central banks, lifting its total gold reserves by 225 metric tons last year - making 2023 the country's highest single year of reported additions since at least 1977, the World Gold Council said.

Wealth Protection

It's the top choice for hedging against losses. Since billionaires have a lot to lose, they make it a priority to hold on to their wealth.

While it may seem advantageous to wait for prices to fall before you buy gold coins and bars, doing so could be a mistake. After all, there's no guarantee that the price of gold will fall in the future. But that's not the only reason it makes sense to buy gold, even at today's high prices.

Due to its reputation for being a safe-haven asset, gold tends to perform well during a recession. For example, when the stock market collapsed in 2007, investment demand for gold spiked and continued to rise, and gold doubled in value between 2007 and 2011.

Con: Gold won't produce income as rapidly as other assets

While stocks and bonds may offer dividends (a share of corporate profits paid to stockholders) and coupon rates (interest paid on bonds), the only way to earn an income by investing in gold is to take advantage of growth in the price of the commodity.

Why won't Warren Buffett invest in gold? ›

Buffett therefore doesn't see any utility in owning gold because it can't produce things. Stocks can grow earnings and profits and pay dividends, and farmland produces fruits and vegetables that can be used and sold, but gold just sits there, waiting for someone to come along and decide to pay more for it.

Apple is Berkshire's largest public stock holding by far. Berkshire's $151 billion Apple stake is roughly four times larger than its second-largest holding. Buffett first bought Apple shares in the first quarter of 2016, and Apple's stock price is up more than 500% since the beginning of 2016.

Buffett said he revises his will every three years, and he still advises his wife to allocate 10% of her inheritance to short-term government bonds and 90% to a low-cost S&P 500 index fund.

About Costco Jewelry

Costco sells only finished jewelry. No loose stones or semi-mounts are available online or in our warehouses. The majority of our jewelry is available in either 14kt gold, 18kt gold, or 950 platinum, with some items being available in stainless steel and silver.

For those looking to purchase gold for the first time, Costco provides familiarity and ease, Mr. Adatia said. “They make it convenient,” he said. “People can physically go in and pick it up and that's it, versus opening up an account and buying gold shares.”

What will gold be worth in 5 years? Two Jakarta-based commodity analysts forecast that the price of gold could reach as high as $3,000 per ounce in the next five years. While they remain bullish, they cautioned that many factors could affect the price of gold within this timeframe.

Buffet started buying stock in a company called Berkshire Hathaway in 1962. At the time, Berkshire was a struggling textile company. Over a period of several years, Buffett's partnerships had bought the majority of the shares in Berkshire, eventually making him the controlling owner.

He's said before that he drinks five cans of co*ke a day and told Fortune in 2015 that he's "one-quarter Coca-Cola." Buffett has also said he frequents McDonald's daily for breakfast, always getting one of three items: two sausage patties; a sausage, egg, and cheese McMuffin; or a bacon, egg, and cheese biscuit.